Posted
by
timothy
on Saturday August 14, 2010 @09:41PM
from the market-distortion-field dept.

pickens writes "A midlevel Apple manager was arrested Friday and accused of accepting more than $1 million in kickbacks from half a dozen Asian suppliers of iPhone and iPod accessories in a federal indictment unsealed and a separate civil suit. Paul Shin Devine, a global supply manager, and Andrew Ang, of Singapore, were named in a 23-count federal grand jury indictment for wire fraud, money laundering and kickbacks. 'Apple is committed to the highest ethical standards in the way we do business,' Apple spokesman Steve Dowling said in a statement. 'We have zero tolerance for dishonest behavior inside or outside the company.' The alleged scheme used an elaborate chain of US and foreign bank accounts and one front company to receive payments, the indictment said, and code words like 'sample' were used to refer to the payments so that Apple co-workers wouldn't become suspicious."

We're talking about the organization that got the SWAT team to take back a stolen iPhone... if they can do that, the fines will probably exceed damages. I can't get an school police officer to look at me with a straight face when I tell them my daughter's Hannah Montana Disney MP3 player was taken on the playground.

From my recollection of the events from Gizmodo [techcrunch.com], the police, with a search warrant, came in and confiscated items on the search warrant. In the report from the Gizmodo editor, no mention of SWAT was mentioned. But please don't let facts get in your way. After a raid with SWAT sounds much more sensational.

Sir, my apartment was robbed while I was out of town for a funeral. We came back, saw toothpicks in our lock, and immediately called the police. Fresh fingerprints all over the place and they didn't investigate SHIT, they took a statement from us and we never heard from them again.

I found one guitar behind my apartment in the bushes. You guys couldn't recover one damned thing for me.

All I've ever seen is uselessness from officers. From Texas, to Tennessee, to Oklahoma, to South Carolina, to California and A

For what it's worth, another anecdotal event, I was burgled a few years ago in Maryland. The cops came, then the next day they sent a detective. They dusted for prints, took notes on what was stolen, etc. 4 months later, they had caught the culprits.

BTW, I very much doubt you have been "From Texas, to Tennessee, to Oklahoma, to South Carolina, to California and Arizona and New Mexico" and witnessed uselessness from officers.

You doubt but you don't have my moving records, now do you? Nice way to assume without thinking critically.

I have lived in all of those places. Sorry I actually have things to do with my life that don't involve me sitting in one state.

Oh, and it's pretty easy to see most police are inherently lazy. "Hey, I can retire with a Pension at 45" is pretty much all I've heard from police that took the job - that is inherent laziness to an extreme.

Yeah well, I'll try not to respond to him next time. Actually I do think there are good cops, but I think they are vanishingly small in number and thus statistically insignificant. A good cop is one who would turn in a bad cop and make sure they get what is coming to them regardless of personal consequences. They hang out with unicorns at the end of the rainbow.

A decade or so ago, there were a string of thefts in the neighborhood I lived in. When the stereo was stolen out of my truck (doing a bunch of damage in the process), I called the police. They had no interest in coming out. Not to check for fingerprints, take photos, file a report... nothing. But I was certainly welcome to go in and file a report. Since my insurance company didn't require a police report in order to cover the theft, I didn't see the point in going in to file a report.The same happened to th

You say that like it's a bad thing. People take factory jobs in China for the same reason that they take any job anywhere else in the world: it beats the alternatives. If Apple pulled out of China, that's a couple hundred thousand people out of work. If the rest of the global electronics industry did likewise, we're talking tens of millions.

Perhaps you should take a moment to google "comparative advantage". Then, maybe you should look into how manufacturing is raising the standard of living in China, just like it did here when we went through the industrial revolution.

Nokia is known to be obsessed with environment and living standards of their workers. They are also one of the most truly global thinking companies who cares about cultural diversity.

Not just that, they purchased Qt from Trolltech and spend millions of engineering hours with millions of dollars to open source their key operating system. That massive work also finds its way to Linux/BSD.

How do you market that? How do you make "investors" care? (nvm how such widespread practices would probably greatly increase the opportunities for investment...though a bit too long term and not within so limited club, I guess)

Nokia is known to be obsessed with environment and living standards of their workers. They are also one of the most truly global thinking companies who cares about cultural diversity.

Not just that, they purchased Qt from Trolltech and spend millions of engineering hours with millions of dollars to open source their key operating system. That massive work also finds its way to Linux/BSD.

The point is, seen anyone giving a fsck lately?

I know that there are plenty of people living in their small imaginary world, where is everything to them, but there is a real world out there, and it's not playing by geek standards.

In other words, I bought a Nokia phone yesterday. And I'd never change it for any iPhone/Android/WM phone.

Have you looked at the Chinese labor market recently? There's a shortage of workers in many places--esp. in Gwangdong--and considerable mobility for workers who are unhappy with their current job. Gross abuses likely still exist in small factories, but the larger ones have to compete on the basis of wages and amenities. The new frontier appear to be Vietnam, and conditions there bear close monitoring, IMO.

Maybe the _whole reason_ it's cheaper to do so? Because it's basically akin to slave labor? Shit doesn't get made for pennies when you have a well paid and cared for workforce but it's easy to ignore the realities of really, REALLY, sub par working conditions when you get a toy to play with after you dropped some of your disposable income, isn't it?

Sorry, but I'd rather not have my Slashdot discussions associated with my employer. Not that I've talked of anything illegal or even distasteful, but I'd rather keep just it separate as a matter of principle. As far as treating employers well, it helps that there are less than 100 employees in total. However, there have already been several discussions on how to keep the environment the same as it grows. As an example, we recently moved into a larger office, which is a part of a big stereotypical corporate

If Americans were willing to work cheaper (and were actually allowed to), we might get some jobs coming back. Instead, we get labor unions that argue for high wages and benefits at the cost of actual jobs.

The Nordic countries are passionate about unions, with something like 80% of workers belonging to one (versus 7-12% for American private sector workers), and yet their unemployment figures haven't suffered. Blaming unions is the easy thing to do, but examine the chronology and you'll find that offshoring really took off long after the American labor movement ran out of steam.

The labor unions aren't inherently the problem. It's what they argue for (in America, at least).

For example, I'd have no problems with a union arguing that the CEO can't make more than 10 times the average starting salary, or that workers must be allowed to take a significant (but reasonable) amount of unpaid leave without risking their job.

I have a problem with unions requiring a certain minimum salary, paid vacations, and other amenities that only serve to cost the employers money without increasing productivity.

In my opinion, all details of that agreement should be negotiable on an individual basis.

If employees want to group their negotiations, that's fine. Don't apply the terms of one employee's contract to someone else. Don't require workers to participate in a strike if they don't want to. Don't require union membership. Don't drive the employer to bankruptcy pushing for ever-higher wages.

I have a problem with unions requiring a certain minimum salary, paid vacations, and other amenities that only serve to cost the employers money without increasing productivity.

Again, that's what you get in the Nordic countries, and it doesn't seem to have much of an effect on employment figures.

In fact, the first item, minimum wages, falls entirely to collective bargaining between unions and industries, at least here in Finland. There is no government-mandated minimum wage. Result? Even the most lowly of cleaners make around $10/hour, with slightly higher wages for night shifts and double pay for Sundays.

No one forces you to join unions here, or participate in strikes. The union's got your back even if you don't want to pay dues (which are minimal), but of course you do miss out in voicing your concerns in collective bargaining if you don't join.

The second item, paid vacations, have little to do with unions in most of the developed world because it is mandated by law. Unions might be responsible for the extra 10 days at some places around here, but almost a month of paid leave is universal across the European Union.

Strange that you think leisure time doesn't increase employee productivity. Exhausted employees don't work as effectively as content ones.

You've never heard of a closed shop, have you? They are plentiful in non 'right to work states'... and that ignores the whole 'card check' issue in Washington right now.

The union's got your back even if you don't want to pay dues (which are minimal),

Depends on the union and shop... in quite a few places because the union does the negotiations for wages (whether you like or not, wheather you are a member or not) may negotiate things in such a way that you are required to

During the cold war it was the same USofA that was continuously beating the drum of the right to form independent unions and political parties.

For that right to be complete it needs to include the freedom not to join, a union that negotiates a closed shop should be dragged into court, even when it's based on international treaties that are being violated.

I'm not sure what your grievance is here. Why would a worker want to sell his labor for less? I did a check of states with right to work laws, and their unemployment rates tend to be high if you except agricultural states like Wyoming and Nebraska.

In my case, when I was sitting without a job for a full year, I would have gladly taken a low wage job, just to get back to work and have some income.

Instead, as the economy got worse, American jobs kept disappearing. One company I called with a question before even applying said that they couldn't afford to hire anyone else. Their application (online) was gone the next day.

Personally, I think the situation's the same in other companies. In addition to the ag

Why not?? Employers have less "right" to employ people than workers have "rights" to jobs. If the business is not a benefit to society then it is missing its main purpose for existing: to provide JOBS. No, its not to make or service people - the purpose is to gainfully employ people - we have far far too few necessary jobs to employ the ever increasing population so we need FLUFF filler jobs to employ the majority of people and a s

"Blaming unions is the easy thing to do" - by CRCulver (715279) on Sunday August 15, @12:02AM (#33254852) Homepage

Agreed, because corporate officer pay is outrageous in larger corporate bodies (millions per week, and yes, I have seen payrolls in my time the last nearly 17 yrs. as an information systems worker who has done payrolls programming and reporting in numerous organizations). Fact is, quite a few corporate officers' personal pay on an annual INDIVIDUAL BASIS (e.g. CEO) often exceeds the entire payroll outlay of entire smaller companies. This is the insane fact no one ever seems to mention or note, and I often

Fact is, quite a few corporate officers' personal pay on an annual INDIVIDUAL BASIS (e.g. CEO) often exceeds the entire payroll outlay of entire smaller companies. This is the insane fact no one ever seems to mention or note, and I often wonder why?

Everyone mentions it. But none of us have any authority over company pay scales. The only people who could do something are those with voting shares. And from what they say in the press, they would like to reduce CEO pay, but then they would have trouble filling

Unions could never stop a company moving offshore. The reason companies were able to move to China and other cheap labor locations away from US first became Nixon and opening trade with China and then the collapse of the USSR.

How can a labor union prevent a company from opening a branch offshore and then from moving operations there? It would be probably a little more difficult but it couldn't stop it, after all even companies that had unions went offshore.

The problem is not unions, but the US implementation of unions. I can't speak for the nordic countries, but in the UK it's very common for employees to have the choice of several different unions to belong to. In the USA, unions tend to be a monopoly. Since they don't have to compete for members, they no longer have to serve the members' interests. They often force companies to only employ union members, meaning that they have a guaranteed membership. Their only interest is in keeping as many people em

There might be another side of that overseas labour. Yes, since they are willing to work much cheaper, they have that work. But going further, cheaper - possibly a work of a type which doesn't have to be optimal in benefitting their place much by itself; but can easily draw people away from those which could, almost via modern day frippery.Who knows if/in how many places the latter is the case...

If a rural village has a factory producing widgets for the Global Widget company, that rural village is exchanging one resource (labor) for another (money). As in all economics, they can then exchange that resource for another (food/amenities/whatever) produced elsewhere.

Depending on the location, it may even be preferable to work on widgets than on farming. In Niger, for example, farmland is scarce, and a decent crop is ever more rare. Nigeriens working in a foreign-run factory

If Americans were willing to work cheaper (and were actually allowed to), we might get some jobs coming back. Instead, we get labor unions that argue for high wages and benefits at the cost of actual jobs. Employment should be an agreement exchanging work for pay. In my opinion, all details of that agreement should be negotiable on an individual basis.

I'm no fan of unions in their modern guise as bargaining collectives, but in the early days unions made tremendous contributions to workplace safety (even matters as small as functional fire escapes). Still, it surprises me that your rant makes no acknowledgement whatsoever of having encountered a positive argument on the validity of unionization. It's clear that some powerful unions overstayed their welcome, and damaged their membership through excessive demands. No organizational structure is perfect. Union leaders make good coin, and sometimes succumb to the temptation to justify their fat pay packet by engaging in brinkmanship negotiation tactics. It takes an extremely secure leader to pocket a fat pay cheque and do nothing, even where that's the best course of action.

On the wage front, it's fairly orthodox among modern economists to believe that a minimum wage does more harm that good to low income earnings (by making it impossible for many to get a job at all).

On the other side of the zinc coin, it's already the case that many companies view minimum wage earners as a pool of disenfranchised schleps who wouldn't know their legal rights if bitten on the backside. Many rights in America exist only if you're wealthy enough to (credibly) threaten to enforce them. Even small-claims court is daunting for someone at a sixth grade literacy level who grew up in an Elbownian-speaking household. It's true the disenfranchised could pool their resources together to protect their rights, in a process resembling unionization, with no fear of reprisals as they work the bugs out of their collaborative process. I've always thought that shit flows down hill well enough on its own accord without so many eager and active helping hands. The reason many economic theories don't work out in practice as advertised is that in much of America, shit flows down hill in pressurized pipelines. Discussions on how to reduce the pipeline pressure lead to questions of civil society, a total non-starter in present day America. First reduce the pipeline pressure, then eliminate minimum wage. In that order, I think it would work.

Is there a way to eliminate the minimum wage to reap the theoretical economic benefits without hanging a "kick me" sign on the bottom rung of the employment ladder? Still haven't figured this out. I'm not against two year apprenticeships at a wage lower than the current minimum, as more of a temporary kick-me sign, though it would surely be abused in some quarters.

Your African aphorism is a bit of red herring. By the time a country has the social infrastructure to engage in productive international trade, the standard of living is already rising abruptly. Ten to twenty years later, not so cheap any longer, and maybe not a bargain at all in relative productivity. I believe the standard of living in Mexico is now comparable to the standard of living I experienced growing up in Canada, long ago.

Usually after an abrupt rise in standard of living a nation faces a painful round of internal change before resuming rapid growth. Even Japan had a major hiccup after achieving American affluence until an old custom regarding financial reporting shell games was finally dismantled.

What I'd like to hear from Apple is that they have canned all the corrupt vendors who went along with the other side of the illicit transactions. That would send a strong message that they mean business on ethical procurement. Merely sacking the individuals with their hands caught in the cookie jar is 99% business as usual.

On the wage front, it's fairly orthodox among modern economists to believe that a minimum wage does more harm that good to low income earnings (by making it impossible for many to get a job at all).

That's not the experience in the UK. They introduced a minimum wage in 1999, and increased it every year. For years after, employment went up, not down. None of the claims that businesses would go bankrupt, or stop employing certain categories of workers turned out to be true.

For sure there are problems with unemployment now because of the recession caused by the banking crisis. But that isn't caused by the minimum wage.

If you examine executive pay for public companies, you'll see that companies usually can afford to increase the payroll. It's just that the executives get to decide which part of the payroll to increase, and big surprise, they choose to pay themselves more, rather than increase the wages of the lowest level employees. It takes minimum wage legislation or unions to deal with this problem.

That's not the experience in the UK. They introduced a minimum wage in 1999, and increased it every year. For years after, employment went up, not down. None of the claims that businesses would go bankrupt, or stop employing certain categories of workers turned out to be true.

We introduced the minimum wage near the start of a bubble, and unemployment fell during the bubble. It's not clear what effect the minimum wage had - would unemployment have fallen faster without it?

The correlation is actually not quite what the grandparent implies. A minimum wage increases the minimum cost of a lot of things. This causes a corresponding increase in the cost of living, which is most noticeable for poor people (who spend a higher proportion of their income on essentials), necessitating

Minimum wage will create incentive to avoid hiring low-pay labor. This will take one of a few forms.

One option is automation. A fancy $1M machine doesn't make much sense if you can pay somebody 10 cents an hour to do the same work (depends on a lot of factors though). On the other hand, with minimum wage that machine starts looking a lot more attractive.

The other common approach is evading the law's jurisdiction. Why pay US workers $7/hr when you can pay somebody in some 3rd-world nation $7/month.

Regular workers? By that, I assume you mean Americans who had to lower their demands to get a job. Yes, of course there will be less money per person. There will also be more jobs, and less outsourcing. That means more money stays in America, and we get to keep buying stuff. I think your assumption of my line of thought is horribly wrong.

Maybe it's simply un-American to reduce our demands in a financial crisis. That would certainly explain the UAW's actions. They're the poster child for American unions. May

Taking advantage of the highest technological systems in the world, and at the same time exploiting poor peasants who will work for pennies per day just seems terribly unethical. Face it - without the infrastructure provided by past generations of American workers, NONE of today's name-brand manufacturers would be where they are today.

Think I'm wrong? Fine - take yourself to Africa, with nothing more than you can carry on an airplane and inside your head, and set up shop to compete with Apple.

Taking advantage of the highest technological systems in the world, and at the same time providing employment for poor peasants who will work for pennies per day...

Seems a little different now, doesn't it? All economic exchanges are based on exploiting others. You go to the store, and con the innocent shopkeeper to give you a gallon of milk for only $2. Meanwhile, the shopkeeper sells off one of his many gallons of milk to some schmuck for $2. At the end of the exchange, you both say "thank you", because you both feel like you've gotten the good end of the deal.

Rural villages in third-world countries making parts for American companies get the money they need to build

Of course it looks different when you change a couple key words. It's called "spin", and it's practiced daily by the newspapers and other media.

"Providing employment" suggests that people who had nothing can now make purchases, such as housing, automobiles, clothes, etc. In fact, "providing employment" often translates to a marginally better diet, and increased chances of survival. I point to Africa as a prime example. I'm quite sure that you can use Google to locate any number of stories about Gap jeans and other factories located in Africa. If anything, the overall quality of life has been degraded in some of those towns. Entire villages have been overwhelmed with unregulated refuse dumps, and their populations have been reduced to scavenging the dumps for survival.

China has it's own towns that have been inundated with waste dumps. I saw one set of photos from China of a home that nestled between piles of scrap and refuse, pretty much lost to view from any other home.

Now compare that to the number of villages that are already overrun with dumps.

When I volunteered in Africa, most of the towns I was in had a large amount of land dedicated to holding refuse. In one village, there was a small (2 or 3 cubic meter) dumpster. It was surrounded by a pile of refuse 10 meters in diameter. Elsewhere in that village, there was an area roughly 50 meters by 100 meters, piled about a meter high with refuse. This was a village without any large industry, mind you. Every day, dozens of

Hmmm.
Apple charges top dollars and nobody gripes. Kind of kills your theory. The simple fact is, that every company who has moved their production from USA, EU, and Japan to China have taken a major hit in quality and ppl are tired of it.

And when I shop, I do look at where it is made at. I have no real issue paying 10-20, even 100% more for better quality products.

At this point, who hasn't moved their production from USA, EU, and Japan? I know there are cars, some food products, and really, really big things built here. But what (brands or genres of stuff) are still built in the US or Europe or Japan?

Cowon [cowon.com] (english site [jetaudio.com] makes music players and mini-tablets that are made in South Korea. They are also some of the best on the market, but tend to be harder to find/buy due to their lack of marketing and they are a Korean company, with very little to no North American market visibility.

Shouldn't be too hard finding quite a few examples. Nokia is not abad one - actually owning around a dozen of their manufacturing facilities, by far most of them not in China, half of them in the EU; there's even one quite close to Cupertino...And I'm not sure if you should even really ask about Japan.

While they're not manufactured in the USA, EU, or Japan; another "not Chinese" company is HTC--maker of many widely available Android and WinMo phones. Their headquarters and manufacturing facilities are in Taiwan.

HTC Electronics (Shanghai) Co., Ltd. engages in research, development, design, manufacture and sale of computer, personal digital assistant (PDA) handsets. The company also engages in design and development of computer software and also provides related technical consultancies and services. The company was incorporated in 2007 and is based in Shanghai, China. HTC Electronics (Shanghai) Co., Ltd. operates as a subsidiary of HTC Corporation.http://investing.bu [businessweek.com]

The indictment describes a scheme in which Devine used his position at Apple to obtain confidential information, which he transmitted to Apple suppliers, including Ang. In return, the suppliers and manufacturers paid Devine kickbacks, which he shared with Ang. The information enabled the suppliers to negotiate favorable contracts with Apple, according to the
indictment.

In case you wanted to know what the scam was, and not read the article.

I am amazed (and pleased) that apple care about this. In most places I have worked this is either accepted or actively encouraged. When I worked for Vic Roads [vic.gov.au] the CEO signed a big vehicle fleet outsourcing deal, then retired and jumped straight into a job with the new operator. The general feeling was "meh".

Where there is excessive control, there's plenty of place for corruption/etc.

So a complete lack of control would lead to few places for corruption? Your argument makes absolutely no sense.

I think he meant excessive control by one person (Jobs). When there is too much control by one person your more likely to see corruption because your stuck with the whims that one person where as if there are many people in control they are more likely to debate amongst themselves and see more of the positive/negatives of suggestions and ideas. So if the one person who controls too much says "no" to your idea that your entire department thinks is amazing then they are more likely to be more corrupt, and sin

While I detest Apple's products and tactics as a company, I don't think they're any more (or less) prone to corruption than any other company. So, either it's specifically and unrealistically Apple-bashing (there's so many better reasons), or it's a condemnation of government intervention in business (the excessive control), or it's a condemnation of EVERY business. All three of those are flamebait/trolling.

Hence the civil suit mentioned in the summary. It would be interesting to see what federal statutes were violated. Wire fraud and money laundering are mentioned, but generally, anti-kickback laws only apply to government contracts. While IANAL, I've worked for an outfit that let managers pretty much cut their own deals with suppliers (stock options, etc.) and they seemed to get away with it. As long as the transactions were legal (taxes paid, etc.) the law seemed to stay out of it.

What give out confidential information about there own company so their suppliers could get better deals. Or do you mean the suppliers paying the bribes for inside information, that would make more sense; you where't clear.

I have a feeling Apple only cares because at some point in the past someone was going to find out about the deal and Apple simply didn't want the negative publicity. If it was going to stay a "don't ask, don't tell" "secret", we wouldn't be commenting on this story right now. Lets face it, more profit is a good thing for all Apple employees and shareholders. Lets also face the fact that most businesses would probably do the same damn thing.

Very strange interpretation of the matter. This manager received about a million dollars from manufacturers for information about Apple products, so they could negotiate better deals. Since the information was owned by Apple, selling it was at least theft - the million dollars should have been paid to Apple. Since those companies wouldn't have paid the money if they hadn't made more than a million using the information, Apple's loss was actually a lot higher.

For me, this explains the white iPhone mystery. It wasn't about the "perfect white tone", it was connected to this guy (IMHO who is doomed) and material manufacturers. I always wondered how Apple, the Apple can't get a manufacturer to produce some tone of white for a device people line up for. It happens to small companies/single designers all the time but not to Apple sized companies.

There was something really mysterious about that white iphone and I think it is connected to this guy and the whole setup.

I think, as it hasn't been settled silently, this thing will be huge soon. BTW; at first read you think like some "cover designer" companies etc. involved, no they talk about the actual device suppliers.

The iPhone 4 was also supposed to come in White. At first, it was to come at the same time. Then "soon" after the black version. Now it is even later, as it is supposedly getting the rumored new iPhone 4 (now without terrible antenna) treatment.

That's the "mystery"? Why the white iPhone 4 was delayed?OMG, this is serious! We should get the Interpol involved ASAP!Wait, that's not enough, let's also get some mystery writers working on solving this too!Better yet, we have to try and get Mr. Holmes, even if it has to be through some time/reality vortex.Or even better, we could tune the time/reality vortex to 24th century ST universe and get Lt. Cmdr Data as Holmes!

Apple is well known for its aggressive pursuit of leaks and leakers, both internally and externally, so it is surprising that this mid level manager thought that he would get away with this. In fact, it was probably inevitable that he would eventually be caught. Steve probably organized some plan whereby a specific piece of information, known only to the middle manager and Job's henchmen, was provided so that when it leaked they would immediately have confirmation of the source. Recall that Apple regularly